Inflation

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What is Inflation?

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is rising general level of prices and it reduces the “purchasing power” of money.

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Wage measured by dollars rather than purchasing power.

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Nominal Wage

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Wage adjusted for inflation.

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Real Wage

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The percent change in prices from year to year.

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Inflation Rate

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Index numbers assigned to each year that show how prices have changed relative to a specific base year.

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Price Indices

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is GDP measured in current prices. It does not account for inflation from year to year.

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Nominal GDP

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is GDP expressed in constant, or unchanging, dollars.

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Real GDP